Life thrives in the laneways

By Chris Vedelago

MELBOURNE'S insatiable desire to shop, eat and party in the city's signature laneways is driving a wave of projects as developers take the retail concept from the niche to the mainstream.

More than a half-dozen major commercial projects around the CBD have adopted laneway designs from the 19th century templates of the Block Arcade and Royal Arcade, or modern equivalents of Degraves Street and Centre Place.

"The public has made it clear they don't want the city to be uniform, with everything in its place, like a supermarket, nor do they want a series of 1960s-era concrete boxes," says Australian Centre for Retail Studies program director Steve Barnes. "Developers have seen this and their new and recent projects are actively trying to sympathetically link the new with the old in their design, offering modern retailing with reference to the past."

The result has been the revitalisation of some of the city's long-forgotten byways and alleys and the creation of new ones, a reversal of a century-old trend that had seen laneways privatised, closed off, underdeveloped, neglected or simply disappear.

Rob Adams, director of design and urban environment for the City of Melbourne, said the process began more than 20 years ago as the council and state government moved to protect and upgrade the city's remaining laneways and alleys, encouraging small retailers to move into the city and take spaces facing the street rather than looking inward.

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The first generation of revitalised laneways included Degraves Street, Centre Place and Hardware Lane. But it has only been in the past five years that corporate Australia has really got in on the act, building or resurrecting laneways inside or next to major developments like Melbourne Central, QV, Urban Workshop and the GPO.

"There's been a real recognition that as far as retail, culture and experience, the laneways are as important as some of the bigger developments and (major) streets," Mr Adams said. "With every development that goes in the city now we ask about what is happening at street level."

Cbus will reopen Goldsbrough Lane when its CBW development is completed this year, which will host about 20 hospitality and retail outlets between Bourke and Little Bourke streets. Rents are reportedly $700 to $1250 a square metre.

Northbank Place, the mixed office and residential project being built by the Far East Consortium and Oceanis Holdings, will create two north-south laneways connecting Flinders Street with Batman Park. The area will contain a mixture of 30 retail, service and public art spaces, with rents advertised at $500 to $700 per sq m.

Other laneway projects are under way at Multiplex's SX1 and SX2 towers in Bourke Street, which will see a strip of 15 shops along Southern Cross (SX) Lane, and up to 6000 sq m of retail space running along multiple laneways in Grocon's redevelopment of the CUB site.

"Plans mooted for the Myer and David Jones redevelopments had also suggested turning the now gated north-south service alleys into similar retail strips," Mr Adams said.

CB Richard Ellis retail services negotiator Max Cookes said the laneway design concept provided the public with what it wanted while maximising the profitability of space for developers. "Clusters of retail outlets on either side of a narrow space creates clusters of people, funnelling pedestrian traffic flow into areas where consumers want to be and yet are almost forced to look at shopfronts," Mr Cookes said.

But it is not just the big end of town that is driving this renaissance. Retailing opportunities continue to emerge in long-established laneways as building owners subdivide tenancies in a bid to capitalise on pent-up demand and maximise rents.

CB Richard Ellis' survey of the CBD's 22 core retail laneways and arcades shows vacancies declined nearly 1% to 2.57% in the quarter to March, with just four posting any vacancy at all. The laneways vacancy rate is now lower than that for CBD shopping centres (4.9%) and street-frontage shops (2.9%).

Manchester Lane, which three years ago had just two tenants, is now home to nearly a dozen hospitality, fashion and service retailers, with another shop under construction.

The lure of increased foot traffic has also led the owners of the office and retail development at 271 Collins Street to cut a east-west access point through to one of the most popular of the laneways, Centre Place.

"The intention is to have a new food and beverage tenancy in the corner, to draw people from Centre Place into the north-south retail strip from Collins Street to Flinders Lane that is being created inside the building," said Fitzroys director Rick Berry.

Traditional laneway retailing has also spread into the western end of the city, where several small-scale laneway developments have emerged.